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Everybody does it. That feeble excuse, heard by every parent of an adolescent at some point, was the best Lance Armstrong could conjure for taking banned performance-enhancing drugs. It simply wouldn't have been possible to win the Tour de France seven consecutive times without being juiced with various substances, he admitted in his hyped interview last week with Oprah Winfrey (which also gave her languishing OWN network a much-needed shot in the arm).

That everybody does it doesn't make it right, as every parent of an adolescent also invariably responds. And even if the cheaters somehow manage not to be proven guilty beyond a reasonable doubt—read Barry Bonds and Roger Clemens—they still wind up in disgrace with fortune and men's eyes, as the Bard would put it.

Armstrong's once-considerable fortune is certain to be shrunk by lawsuits, while his market value as a spokesman is down there with that of Michael Vick, the convicted animal abuser whose behavior ranks as sufficiently egregious to be the only other athlete to be fired by Nike. As for Bonds and Clemens, recently conspicuously blackballed in their first year of eligibility for baseball's Hall of Fame, endorsements probably aren't exactly pouring in for the surly duo these days. But it's also unlikely they're about to be pushed to the lengths of Pete Rose—the ex-major leaguer banned from baseball for betting on games while playing for and managing the Cincinnati Reds—whose just-launched reality TV show gives new meaning to his nickname from his playing days, Charlie Hustle.

Among central bankers, however, that everybody is doing it apparently constitutes sufficient reason to join in the global money-printing surge. Without injecting their economies with monetary steroids on a massive and continual basis, like Lance Armstrong, they think there is no way they can compete internationally against other countries that are doing it, too.

The latest to join the juicing spree has been the Bank of Japan, with the prodding of the newly elected Liberal Democratic Party government led by Prime Minister Shinzo Abe, which was swept back into power on a platform to cheapen the yen and replace the two past decades of deflation with outright inflation. And it's hard to argue why the Japanese shouldn't join in a policy that's paid off for their competitors, notably America. The cheap dollar has helped move the merchandise for American manufacturers, writes John Lonski, Moody's chief capital-markets economist.

"Had the dollar not incurred a deep slide against major foreign currencies, what remains the weakest U.S. economic recovery since the Great Depression would have been even feebler," he writes in the firm's research weekly. "Notwithstanding the most severe global recession since the Second World War, U.S. real exports grew a relatively brisk 5.3% annualized, on average, since [the second quarter of 2002]. By contrast, when the dollar exchange-rate index appreciated by a cumulative 38% from Q2-1995 to Q1-2002, real exports rose by a slower 4.0% annualized. In addition, from Q2-1995 to Q1-2002, exports' share of U.S. [gross domestic product] fell from 10.6% to 9.6%. By contrast, exports recently attained a record 14.0% of GDP. Moreover, since mid-2007, exports have exceeded U.S. business investment spending in the GDP accounts. In fact, exports' share of GDP now exceeds business capital spending's record 13.7% share."

That surge in investment has been a big thrust behind the increasingly apparent U.S. manufacturing renaissance, along with the nation's energy-cost advantage from the surge in oil supplies and especially natural gas priced at a fraction of its cost abroad. In addition, Citi analyst Deane M. Dray also credits relatively cheap labor, automation, tax incentives, and the efficiency of a supply chain that doesn't stretch across the Pacific. But he also notes the dollar's decline against the Chinese yuan as incentive to move manufacturing to the States—and for Japanese companies to move facilities away from China.

The cheap dollar owes much to the Federal Reserve's successive rounds of quantitative easing, the polite term for the central bank's buying of bonds with money created out of thin air. The Fed's current policy—let's call it QE-4ever—consists of buying a combined total of $85 billion Treasury and agency securities per month, which is close enough to a cool $1 trillion a year for government work. And by Lonski's reckoning, the dollar is down by 17% against a broad range of currencies compared with the 2002-07 recovery and off nearly 50% from its record high of 1985.

But competitors are complaining about the Americans' use of monetary steroids to boost export performance. Back in 2010, Brazil complained that the Fed's QE2 threatened a "currency war" of competitive devaluations. And now, like Lance Armstrong, Japan says it needs the monetary injections to compete.

At least in the stock market, the results have been positive. The Nikkei 225 is up nearly 25% since early November, including a 2.9% jump Friday, with the help of the elixir served up by the nearly 12% plunge in the yen over that span, to more than 90 yen to the dollar from less than 80. But, if you're keeping track in greenbacks—which Barron's former foreign editor Peter du Bois would remind readers is what counts—the gain in the dollar-denominated
iShares MSCI JapanEWJ -1.9561815336463224%iShares MSCI Japan ETFU.S.: NYSE Arca12.53
-0.25-1.9561815336463224%
/Date(1427835600171-0500)/
Volume (Delayed 15m)
:
25603086AFTER HOURS12.559
0.02899999999999990.23144453312051078%
Volume (Delayed 15m)
:
3383391
P/E Ratio
N/AMarket Cap
N/A
Dividend Yield
1.0585953711093377% Rev. per Employee
N/AMore quote details and news »EWJinYour ValueYour ChangeShort position
Index exchange-traded fund (ticker: EWJ) is only about half that of the Nikkei.

Yet, writes Joan McCullough, who offers her decidedly nonconsensus view for East Shore Partners, a Long Island research and brokerage boutique, the benefits of QE have been elusive for both Japan and the U.S. "Let's see. They did it. And it didn't work. Then we did it. And it didn't work. Now they're gonna' do it again because they're sure that it works."

Here in the U.S. of A., she explains, money-printing "causes a serious divide between consumers and biz. John Q. gets crumbs in the form of miserable wage growth. Biz gets all the capital it needs/wants. So far, they're gettin' away with this screaming imbalance. But as the gap between the two widens, at a point, will come a day of reckoning.

Meanwhile, Joanie continues, "It is at the same time shocking and disheartening that these goobers have not yet figured out that printing money does little beyond goosing stock and commodities prices." And the liquidity-boosting drugs have managed to get some movement in housing, with starts actually approaching the one-million annual rate—which marked the recessionary nadir of past cycles. But, as Lonski reminds us, recent experience should inspire caution about a housing revival without solid jobs gains.

The dual nature of the central-bank money-printing is evident even in housing. "A great example of our bifurcated system is elevated premiums for homeowners' insurance," McCullough writes. "We are paying more because the cost to replace the home has jumped…owing to the direct impact of higher commodities prices on building materials. But at the same time, you can't sell the house for half of that number."

Another danger of steroids is the urge to retaliate against anybody who crosses you, which extends to the currency arena. U.S. auto makers, which have enjoyed the benefits of a cheap dollar that has helped their resurgence, last week complained about the yen's sharp drop, just as Brazil objected to the U.S. policies. Meanwhile, the euro—which has surged past $1.35 from a low around $1.20 last July and even more against the yen—looks like the one who isn't going along with the crowd. "The euro's latest climb not only will make it more difficult for Europe's peripheral economies to stabilize, the pricier euro also threatens the global competitiveness of Europe's core economies," adds Moody's Lonski. So, that puts the likes of
Volkswagen vow3.xe -0.820328131252501%Volkswagen AG Non-Vtg Pfd.Germany: XetraEUR247.85
-2.05-0.820328131252501%
/Date(1427841309000-0500)/
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:
984447
P/E Ratio
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116465508718.784
Dividend Yield
1.960863425458947% Rev. per Employee
341652More quote details and news »vow3.xeinYour ValueYour ChangeShort position
(VOW3.Germany) and
Fiat
(F.Italy) at a disadvantage versus
Toyota MotorTM -1.8660119256401262%Toyota Motor Corp. ADSU.S.: NYSEUSD139.89
-2.66-1.8660119256401262%
/Date(1427835722390-0500)/
Volume (Delayed 15m)
:
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P/E Ratio
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240010381475.792
Dividend Yield
N/ARev. per Employee
739708More quote details and news »TMinYour ValueYour ChangeShort position
(TM) and
Honda HMC -2.7027027027027026%Honda Motor Co. Ltd. ADSU.S.: NYSEUSD32.76
-0.91-2.7027027027027026%
/Date(1427835836737-0500)/
Volume (Delayed 15m)
:
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0.01850000000000310.05647130647130647%
Volume (Delayed 15m)
:
P/E Ratio
10.503366463610131Market Cap
60307984111.9009
Dividend Yield
2.3905982905982905% Rev. per Employee
586254More quote details and news »HMCinYour ValueYour ChangeShort position
(HMC), which may force the European Central Bank to weaken the euro.

What everybody's doing is racing to the bottom, which doesn't make it right.

THE STOCK MARKET, as noted, continues to be the major beneficiary of the flood of liquidity pumped in by central banks. The Dow industrials gained 1.2% on the week, while the S&P 500 tacked on 1%, putting the gauges at five-year highs. Chalk this up to the TINA factor, writes Jason Trennert, head of Strategas Research Partners, as in There Is No Alternative to stocks in a world of emaciated interest rates, suppressed volatility (the CBOE Volatility Index, aka the VIX, ended the week at 12.40, a somnambulant reading not seen since 2007, before the crisis hit), and with short interest at similarly suppressed levels.

On the Nasdaq, the Composite added only 0.3% as
AppleAAPL -1.5351744876157316%Apple Inc.U.S.: NasdaqUSD124.43
-1.94-1.5351744876157316%
/Date(1427835600323-0500)/
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:
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0.0199999999999960.016073294221650727%
Volume (Delayed 15m)
:
P/E Ratio
16.657295850066934Market Cap
736073426681.742
Dividend Yield
1.5108896568351684% Rev. per Employee
2153110More quote details and news »AAPLinYour ValueYour ChangeShort position
(AAPL), the biggest name in the universe, ended the week just a penny over $500, a far cry from its $700-plus peak in September. The big winner was
Dell
(DELL), up 18% higher on the power of financial, not computer, engineering. As detailed on page 24, it reportedly is the likely object of a leveraged buyout.

A potential Dell deal further attests to the power of central-bank liquidity, which has driven down junk-bond yields to record lows, making the substitution of cheap debt for equity attractive again. But the benefits haven't trickled down. The University of Michigan's consumer-sentiment reading slumped further in January, to 71.3, from December's already depressed 72.9. Money-printing evidently can't offset the impact of paychecks shrunk by higher payroll taxes.